Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity Current Year Current Yr: 1 Yr Ago: 2 Yrs Ago: $ 27,701 81, ese 100,943 8,832 246,300 $ 464,856 (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? Required 1A Required 18 Required 2A Required 28 Cash $ S S $ 114,592 85,645 162,500 102,119 $ 464,856 Complete this question by entering your answers in the tabs below. Compute the acid-test ratio for each of the three years. + 27,701 + 32,700 + 32,088 + 1 Year Ago $ 32,700 57,786 73,395 8,500 228,357 $ 400,738 $ 66,370 93,091 162,500 78,777 $ 400,738 Numerator: Short-term investments Acid-test ratio Current receivables 2 Years Ago $ 32,088 43,217 46,491 3,637 201,967 $ 327,400 $ 42,352 71,632 163,500 49,916 $ 327,400 I I Denominator: Current liabilities "I Acid-Test Ratio Acid-test ratio 0 to 1 0 to 1 0 to 1
Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity Current Year Current Yr: 1 Yr Ago: 2 Yrs Ago: $ 27,701 81, ese 100,943 8,832 246,300 $ 464,856 (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? Required 1A Required 18 Required 2A Required 28 Cash $ S S $ 114,592 85,645 162,500 102,119 $ 464,856 Complete this question by entering your answers in the tabs below. Compute the acid-test ratio for each of the three years. + 27,701 + 32,700 + 32,088 + 1 Year Ago $ 32,700 57,786 73,395 8,500 228,357 $ 400,738 $ 66,370 93,091 162,500 78,777 $ 400,738 Numerator: Short-term investments Acid-test ratio Current receivables 2 Years Ago $ 32,088 43,217 46,491 3,637 201,967 $ 327,400 $ 42,352 71,632 163,500 49,916 $ 327,400 I I Denominator: Current liabilities "I Acid-Test Ratio Acid-test ratio 0 to 1 0 to 1 0 to 1
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
i need help with this acid test ratio
![Required Information
[The following information applies to the questions displayed below.]
Simon Company's year-end balance sheets follow.
At December 31
Assets
Cash
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Liabilities and Equity
Accounts payable
Long-term notes payable
Common stock, $10 par value
Retained earnings
Total liabilities and equity
Required 1A Required 1B
Current Year
Current Yr:
1 Yr Ago:
2 Yrs Ago:
$ 27,701
81,080
100,943
Cash
$
$
$
8,832
246,300
$ 464,856
$ 114,592
85,645
162,500
102,119
$ 464,856
(1-a) Compute the current ratio for each of the three years.
(1-b) Did the current ratio improve or worsen over the three-year period?
(2-a) Compute the acid-test ratio for each of the three years.
(2-b) Did the acid-test ratio improve or worsen over the three-year period?
27,701 +
32,700 +
32,088 +
Complete this question by entering your answers in the tabs below.
Compute the acid-test ratio for each of the three years.
Required 2A Required 2B
Numerator:
Short-term investments
1 Year Ago
$ 32,700
57,786
73,395
8,500
228,357
$ 400,738
$ 66,370
93,091
162,500
78,777
$ 400,738
+
Acid-test ratio
+
+ Current receivables
2 Years Ago
$ 32,088
43,217
46,491
3,637
201,967
$327,400
$ 42,352
71,632
163,500
49,916
$ 327,400
Denominator:
/ Current liabilities
I
1
1
= Acid-Test Ratio
Acid-test ratio
0 to 1
0 to 1
0 to 1
=
=
=
=](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb5d25624-83b9-4e43-8efc-e99700a25dc9%2F595393cf-f8f6-4560-a193-3000a690441d%2Fg32w2kv_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
[The following information applies to the questions displayed below.]
Simon Company's year-end balance sheets follow.
At December 31
Assets
Cash
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Liabilities and Equity
Accounts payable
Long-term notes payable
Common stock, $10 par value
Retained earnings
Total liabilities and equity
Required 1A Required 1B
Current Year
Current Yr:
1 Yr Ago:
2 Yrs Ago:
$ 27,701
81,080
100,943
Cash
$
$
$
8,832
246,300
$ 464,856
$ 114,592
85,645
162,500
102,119
$ 464,856
(1-a) Compute the current ratio for each of the three years.
(1-b) Did the current ratio improve or worsen over the three-year period?
(2-a) Compute the acid-test ratio for each of the three years.
(2-b) Did the acid-test ratio improve or worsen over the three-year period?
27,701 +
32,700 +
32,088 +
Complete this question by entering your answers in the tabs below.
Compute the acid-test ratio for each of the three years.
Required 2A Required 2B
Numerator:
Short-term investments
1 Year Ago
$ 32,700
57,786
73,395
8,500
228,357
$ 400,738
$ 66,370
93,091
162,500
78,777
$ 400,738
+
Acid-test ratio
+
+ Current receivables
2 Years Ago
$ 32,088
43,217
46,491
3,637
201,967
$327,400
$ 42,352
71,632
163,500
49,916
$ 327,400
Denominator:
/ Current liabilities
I
1
1
= Acid-Test Ratio
Acid-test ratio
0 to 1
0 to 1
0 to 1
=
=
=
=
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